Mundungus is initially set as a guard over Harry Potter, a post he deserts in order to cut a deal on some cauldrons which have "fallen off the back of a broom". Mundungus reappears after the Dementor attack, and is chastised (both verbally and with a shopping bag full of cans of cat food) by Mrs. Figg, who orders him to report to Dumbledore.

We see him next at the kitchen table at headquarters of the Order of the Phoenix, of which he is evidently a part. He is asleep at the table; roused, he mumbles that he agrees with Sirius. This is apparently the limits of his usual involvement, making him singularly ineffective as part of the council. At dinner, he tells a story that involves selling a load of toads to another underworld character, the joke of which is that they were his own toads that Mundungus had stolen from him; chastised by Molly Weasley, he says that it is all right because the other man had stolen them himself.

He gets into trouble with Molly Weasley when he tries to bring his load of stolen cauldrons to Headquarters for storage. He also provides a number of controlled magical ingredients to Fred and George Weasley, which helps them set up their magic shop.

When the initial meeting of Dumbledore's Army is held in the Hog's Head, Mundungus is present, unbeknown to Harry, and reports back to the Order. Sirius Black, revealing this to Harry, says that Mundungus was heavily veiled and disguised as a witch because he had previously been barred from the Hog's Head, and admits that Mundungus had been tailing Harry.

Mundungus somehow finds a car to take the Weasley family to St. Mungo's, to visit with the injured Arthur. We do not learn where he got the car, nor do we learn where he left it after dropping the Weasley family at the hospital, or how the family returns to Headquarters.

Apparently, since the death of Sirius, Mundungus has been clearing valuables out of the headquarters of the Order and selling them. Harry catches him in Hogsmeade trying to sell Black family silver to the bartender from the Hog's Head, whereupon Mundungus goes into hiding.

It is mentioned later in the book that Mundungus has been sent to Azkaban for impersonating an Inferius.

Mundungus, now freed from Azkaban, is set the task of being one of the seven Potters when Harry escapes from the Dursleys' house. He is very reluctant to do this, fearing that he will be a target. Riding a broomstick behind Alastor Moody, he gets cold feet and Disapparates, leaving Moody to be hit by the Killing curse that had been aimed at Mundungus by Voldemort.

The remaining members of the Order of the Phoenix, discussing how Voldemort had known when Harry was going to be moved, had suggested that it might be Mundungus who had leaked the secret. However, it is recalled that Mundungus had suggested the six mock Potters, and that was the one part of the plan that Voldemort had not been prepared for.

After their arrival at Grimmauld Place, and the discovery of the identity of R.A.B., Hermione recalls the "heavy locket that none of them could open." Remembering that Kreacher had been stealing things back that they had been trying to discard, the Trio search Kreacher's sleeping area with no result, and then Harry summons Kreacher. Kreacher says that the locket is unfinished business for him, he had been told to destroy it and had not been able to. He also says that Mundungus had stolen it from him. Winning Kreacher over to his side by saying that they were planning to destroy the locket, and by giving Kreacher another locket which had been his old master's, Harry sends Kreacher out to find Mundungus.

When Mundungus arrives a few days later, under threat of "persuasion" by Kreacher he admits to having taken the locket, but then had it extorted from him by Dolores Umbridge.

In the Hog's Head, Harry happens to see a magic mirror, twin to the one given to him by Sirius Black. The bartender says that it had been sold to him by Mundungus, and he had been using it from time to time to keep an eye on what Harry was doing.

When Harry relives Severus Snape's memories, he sees the portrait of Albus Dumbledore, in conference with Snape, developing the plan of having multiple mock Potters to allow the escape from Privet Drive. Dumbledore says that this is Harry's only chance of escape, as Snape must give Voldemort Harry's true departure date to stay in Voldemort's inner council, and suggests that Mundungus should be the one to mention it to the Order. We later see a memory of Snape, in a pub, teaching this plan to a Confunded Mundungus.

Mundungus evidently has significant magical abilities related to concealment and escape, as he is able to overpower Kreacher in order to steal the valuables from Grimmauld Place, and is able to hide from Kreacher for several days. Kreacher tells Harry that Mundungus was very tricky.

Mundungus has several unsavory habits, including a preference for a blend of pipe "tobacco" that apparently smells quite strongly of burning socks, and a very loose set of ethics regarding other people's property and commerce laws, which make him less than popular with the stricter members of the Order. Molly Weasley seems to accept his membership in the Order only because Dumbledore does; the other members of the Order are more amused by him, but still don't seem to entirely trust him.

Mundungus himself, we are told, respects Dumbledore, and has joined the Order at Dumbledore's request out of that respect. Dumbledore feels that the Order needs to know what is happening in the Underworld, and needs to get its own message out to that population, in order to succeed.

The real world is not composed entirely of heroes, villains, and the masses; apart from those wholly on the side of good, and those wholly on the side of evil, there are those on the fringe who don't care who's in power, but simply do what they need to do in order to survive, with no more concern for legality or ethics than they are forced to have. In a world as fully imagined as the world of Harry Potter, clearly we must find a similar underclass. Mundungus Fletcher is the sole representative of that underclass to whom we are introduced, though clearly, from his stories, we can see he is not the only denizen of that group. It might seem curious that so many of the stories we hear about the underworld end up involving Fletcher, but we must also bear in mind that with the limited Wizarding population, there are relatively few fringe dwellers.

Fletcher is, of course, critical to the success of the Twins' venture. We learned in the first book that some magical items are not tradeable, notably dragon eggs. If dragon eggs are prohibited goods, despite the useful qualities of dragons and dragon products (as seen by the high value placed on dragon liver in the Apothecary in Diagon Alley in that same book, and Dumbledore's oft-mentioned dissertation on The Twelve Uses of Dragon's Blood), clearly there must be other potentially-useful but prohibited magical items. Fred and George are experimenting with new fields of magic, and they will need proscribed ingredients and equipment in order to create the new potions, charms, and devices that they plan to sell. The only sources of such items would be the shops in Knockturn Alley, which seems to cater more for the very dark wizards, or Fletcher and his ilk. While we expect that the Twins will eventually visit Knockturn Alley in search of ingredients, Fletcher is likely able to procure them more cheaply, particularly in the smaller quantities the Twins would need initially. And Fletcher is grudgingly accepted as an associate of the Twins, through the Order of the Phoenix, which is a critical point while they are younger than 17 and so nominally under Molly Weasley's care.

It is also important to remember that, had it not been for Mundungus, Harry's quest would have ended prematurely. It was from him that Aberforth Dumbledore obtained the two-way magic mirror, which assisted him with effecting Harry's escape from Malfoy Manor. Had Mundungus not stolen said mirror, it is extremely unlikely Harry would have escaped.